Brasília, September 3, 2003 (Agência Brasil - ABr) - The Central Bank (BC) will replace, for a period of at least two years, two financial institutions that currently manage approximately US$ 250 million of Brazilian international reserves abroad.

Since 2000 six international financial institutions (Barclays, JP Morgan, Salomon Brothers, Crèdit Agricol, BIS, and Robeco) have been in charge of managing part of Brazil's reserves. Of Brazil's total reserves of US$ 47.758 billion, US$ 1.5 billion are currently managed by these banks.

According to information from the head of the Department of Operations of Brazilian International Reserves, Daso Maranhão Coimbra, the returns on Brazil's reserves are considered satisfactory, but the amount assigned to foreign banks will not be great. "We chose an amount that is sufficient for the country to be treated as a preferred client. But we shall not exceed this limit, because we regard the administration fees as very high," the technician remarked. The average rate for administration fees charged by these institutions is 0.12%.

Coimbra also informed that, over the past three years, the return on this portion of Brazil's international reserves in the hands of third parties was 25% superior to the dollar.

The selection process for the new institutions began on Tuesday (2) and will continue through September 26, when the qualification form should be delivered to the BC. Also according to information provided by Coimbra, the BC intends to change managers every two years. The criteria that led to the replacement of the two institutions are related to their performance in the management of the funds. (DAS)